How DevHeads Landed Its First Paying Customers in July 2023 With a $250 Website Fee and $40 Monthly Hosting (Interview with Co-Founder Fortuna Kadima)

Introduction and Company Overview

Nathan Latka

00:00Guys, there you have it. Devheads, they're quitting their full time jobs. They're making $30 a pop right now. They're saying, screw it. We're going in. We're gonna help build software for these school districts in Missouri. Our first school district's already gonna be about equal to our first our salaries make it our jobs. They make recurring revenue on hosting and other items looking to build from here. Hey, folks. My guests today are Fortuna and Kobe. They are

00:21building devheads, which is a young software and hardware development company targeted at local businesses. Their goal is to provide a personal experience that larger scale companies can't deliver. They target local companies because they're often forgotten about or unable to afford the development fee of large scale businesses. Fortuna, Kobe, you ready to take us to the top?

Fortuna Kadima

00:37>> Yeah. We're ready.

What DevHeads Builds for Local Businesses

Nathan Latka

00:39Alright. So first off, just to be clear, you guys are you're a consulting firm that codes software for local businesses?

Fortuna Kadima

00:46>> Yep. Yeah.

Nathan Latka

00:47Are these websites what are what are local businesses asking you to code usually?

Fortuna Kadima

00:50>> Right now, we're going on updating a lot of websites, and we have one business that's like just providing a personalized app that keeps track of all their appointments coming up. And then a local, it's not really a business, but with our school district, we're partnering with them to connect the alumni system to the current students so that current students can reach out for advice whenever they need it.

Nathan Latka

01:09I see. And what's your greatest background? Are you engineers?

Fortuna Kadima

01:11>> Yep. We're both engineer we're both computer science.

Nathan Latka

01:14Who codes what? Who's front end? Who's back end? Who's full stack?

Fortuna Kadima

01:18>> I'm the back end guy. I'm front end.

Nathan Latka

01:20Alright. Well, Kobe, what's your go to front end tool right now?

01:24I use VS Code to code most of my applications.

01:27Okay. And Fortuna, on your side, what's your what's your back end favorite right now?

Fortuna Kadima

01:30>> Right now, it's PHP. We haven't got it, like, super deep into back end, but PHP just it's carrying us right now. Yeah.

Nathan Latka

01:37Alright. Great. When did you guys land your guys'first customer, paying customer? What year?

First Customers and Contracts

Fortuna Kadima

01:42>> We landed this year. We have multiple paying customers. Currently, we're lined up to do 40 websites this month. We have a big contract with our school district to make provide them that connection between the alumni system and what's it called, the current students. So we have that big contract, and then we're working on getting more contracts. So right about now we have, like if we count the websites as contracts, we're about 41 contracts right now.

Nathan Latka

02:05But when what month this year did you get your first dollars of revenue?

Fortuna Kadima

02:08>> The first July was our first month. Yeah.

Nathan Latka

02:11That's great. Okay. Okay. So this month, we're recording July 12. So you got your first customer this month?

Fortuna Kadima

02:16>> Yeah. Yeah.

Nathan Latka

02:17What are they paying?

Pricing: Websites and Hosting Fees

Fortuna Kadima

02:19>> The school district, what we're still in negotiations with it, but we're trying to get in that $10k range for to provide that for school district. The websites we're pumping out, it's $240 per, $250 per website. And then we have a hosting fee of $40 per month to where we provide the virus protection. We'll update your domain whenever you need more from your website. Like, let's say you need a new software that you can't find online or

02:41>> we go find it for you, we'll be whoever's offer Goat out there, which again, that $40 a month.

Nathan Latka

02:47And why do they need you for that? Why can't they use GoDaddy or Bluehost or or some of these providers?

Why Clients Choose DevHeads Over GoDaddy

Fortuna Kadima

02:51>> Well, because when you're launching your own business, you you where our goal is, like, we're your IT team. Like, we want you to not worry. Just worry about your business. And we provide, like, that personal experience like GoDaddy or Bluehost. They're not gonna go do daily runs on your websites. Make sure, like, okay, that your website's optimized for today. It's still running fast. Like, we do daily speed checks, daily virus checks. That's the that's the stuff

03:12>> GoDaddy and Bluehost, they've gotten too big to, like, personally check that for every single website.

Nathan Latka

03:17Most folks listening right now, they're, you know, they're working a full time gig thinking about launching their own company. You guys, it sounds like, have you quit for your full time jobs? Are you all in on devheads?

Quitting Full-Time Jobs to Go All In

Fortuna Kadima

03:25>> Oh, we're about to be all in on devheads starting August.

Nathan Latka

03:28Oh, come on. About to be is an all in. When are you guys quitting your jobs?

Fortuna Kadima

03:31>> Like, within the next weeks, it looks like we'll quit and just, like, go all in devheads. Because right now, it's, like, it's twelve hours a day mostly on devheads. It's like it's your we do our full time jobs. Our full time jobs are pretty laid back. We're sitting around most of time, so we can be there and still work on dev heads. But, like, in the next week, we'll quit our full time job and just, like,

03:50>> strictly dev heads.

Nathan Latka

03:51Kobe, did that make you nervous?

03:53Nah. I'm all for it.

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06:22What what help me understand what you're giving up. Are you comfortable sharing what your salary is at your current job just so people can understand what you're giving up?

Salaries Given Up and Financial Derisking

Fortuna Kadima

06:28>> Our current salaries are not too high. It's, like, 30 k a year. So it's like Yeah. We we just wanna get after it because our the first contract we've signed with our school district, it's like that's almost our salary right there. So it's like yeah. Mhmm.

Nathan Latka

06:41Have you guys how are you thinking about you know, people think when you launch a startup, it's very risky, but some of the best founders actually derisk the starting process. You know, they have savings. They've worked hard to save up things like that. How are you guys derisking sort of buying yourself some time to get dev head off the ground even when you're not making a full time income from your full time job?

Savings Runway and Startup Network

Fortuna Kadima

06:58>> Right now, we have sit we have between us, we have savings. We have about 15,000 saved up to go towards that. That's that's fine. And then we have we're building connections from another startup in St. Louis. What is it called? Bolto AI with Mark. He's been able to provide us with a lot of resources that he had when he was doing his startup just a few years ago. They launched in 2017, last year, he did about

07:20>> 5,000,000 in revenue. So having him as a resource helps a lot too.

Cutting Personal Expenses

Nathan Latka

07:23Mhmm. That's great. One of the things I always appreciate about, you know, founders starting out is how low they've kept their personal expenses. Kobe, tell me a story about some personal expense that you have just kept so low, people are gonna be shocked by it.

07:37The personal expenses to avoid copyright, I just try to go on, like, iStock, and I'm trying to get, like, the low like, the cheapest, like, quality stock images. Right? Because I'm not trying to I'm not trying to go out and, like, spend a bunch of money just to have, like, like, images and stuff like that. And I'm trying to I'm trying to find, like, the cheapest solution to getting our website to have the best quality runtime

08:01possible because you

08:02No. But, Kobe, talk to about your personal expense. Like, for for example, if you guys are both to able, like, get food on your table and, like, your rents in in Missouri for really low, you don't have to make a bunch at the dev heads to, like, live, basically. So tell me a personal story.

08:16Okay. So a personal story is I've limited my spending to, like, let's say, if I really, really, really need something to eat, it's probably gonna be, like, twice per week. Like, I'm just trying to save money, just cook food at home just so, like, I I know that my money is going towards this company.

08:34That's awesome. And then what about what about on on your end, Fortuna?

Fortuna Kadima

08:37>> For me, I'm kind of on the food to eat side too, but then for me, I my phone bill used to be incredibly high. I've downgraded to, like, a a local carrier. Not really local carrier, but, like, one of the lower end carriers just for a time being. My phone bill went from, like, $80 a month to now it's, like, 20. So I'm like, okay. Yeah. I'm saving $60 that that can go back towards dev heads

08:55>> in the long run. And then I'm just like, I've limit we both limited eating outs. Like, I've done it to about, like, one day a week and it's, I'm eating almost the same thing every day, but it's, like, it'll be worth in the long run. Yeah.

Equity Split and Team Structure

Nathan Latka

09:04I love that. I love that. Alright. Who owns more equity?

Fortuna Kadima

09:07>> Right now, it's about a 50/50 share.

Nathan Latka

09:09What if you disagree?

Fortuna Kadima

09:12>> We have one more person in dev head. We have one more team member, Brandon. He wasn't able to make this meme, but, like, he's right there. Like, he's the one who will, like, see proof both sides. Like, he's the advertisement. Like, he'll get our names out. And he's like, I believe this was a better run for a company. Like, we can both respect Brandon's opinion.

Nathan Latka

09:29But Brandon doesn't own any equity?

Fortuna Kadima

09:31>> No. Brandon doesn't currently doesn't own any equity.

Long-Term Vision: Missouri School Districts

Nathan Latka

09:33I see. I see. Alright. So what's the long term goal? You're you're doing the school district 10 k. You're doing a website for $250 a pop. Four years from now, what do you guys think devheads looks like?

Fortuna Kadima

09:43>> Our goal is to see, like, with the school district stuff, see how first year, let's have, like, our school district, our solo school district, let's get all the results in, and let's be able to bring that to more, like, more school districts in Missouri. Our goal is to eventually reach out to every school district in every high school in Missouri, at least. We have 960 high schools. If we're able to We're gonna increase the price way

10:04>> more than take care of pop. It's like, let's use ours our high our school superintendent to reach out to those other ones. And, like, every single high school wouldn't be at at, like, 40 to 50 grand per high school that we incorporate that into so that the high schools can later on go connect to our alumni system. And eventually, we wanna get up there to where it's like it's almost mandatory in every high school to have this connection

10:23>> system. So we're looking at the long terms, like getting up to Missouri senators and seeing if that's possible to get this in every single high school.

Building Recurring Revenue Through Hosting

Nathan Latka

10:30It's a lot of hustle every month to go find a new high school to build a website for. How do you build recurring revenue so you don't have to think about new money coming in every month?

Fortuna Kadima

10:38>> Our hosting builds us recurring revenue and then usually with our hosting usually once a month, we can get a new contract from one of our the current people we host like, hey. I need this to be done. And that's how we do a lot of recurring revenue and the hosting for $40 a month with our 40 websites that we're about to that we're gonna build out this month. That's gonna give us the recurring revenue we'll need

10:57>> for now. So just

Nathan Latka

11:00>> Yeah.

11:00But how do you mean, $40 a

11:01month to hosting is fine, but you're also then paying 10 to 20 bucks of that out to the actual host provider. The margin's not really a software margin. That's more like a cost of goods sold. Are you guys thinking about building any internal software tools that you will then sell to school districts over time?

Fortuna Kadima

11:15>> That connection software is kind of like we wanna get in the door, build that reputation. So whenever school districts come for the next big problem we need and that we didn't even think about. So when we first launched some the connection program we're working on right now, the school district's like, oh, we need this as well because we have to keep track of what our alumni is doing like a year out from now. Like the state

11:36>> of Missouri already requires them to do that. So that's our long term goal, just seeing how far we can take that. Mhmm.

Famous Five: Books, Tools, and Advice

Nathan Latka

11:42Mhmm. That makes a lot of sense. So this is very cool. Let's wrap up here, guys, with the famous five. Kobe, I'm gonna go to you first. Alright? Give me a CEO you're following or studying.

11:51CEO I'm following or studying. Honestly, the man the man of myth and legend. You are my

11:57Alright. Fair enough. Fortuna, this one's for you. What's your favorite book?

Fortuna Kadima

12:02>> My favorite book, the one that started all Rich Dad Poor Dad is the one that got us into that mindset.

Nathan Latka

12:07Number three, Kobe, your favorite online tool.

12:11My favorite online tool. Well, online tool, I would just go go back to VS Code. It's like what started it. Or I'll say LinkedIn. LinkedIn also, I like that website because it actually helped. LinkedIn learning was what helped me, like, learn how to actually code in HTML and, like, CSS and websites.

12:29Love that. Alright. Opportunities. Last couple we'll throw at you. How many hours of sleep do you get every night?

Fortuna Kadima

12:33>> I'm at three right now.

Nathan Latka

12:35Alright. Three. And what's your situation? Married, single, kids?

Fortuna Kadima

12:39>> I'm single right now.

Nathan Latka

12:40Alright. And how old are you?

Fortuna Kadima

12:42>> 19.

Nathan Latka

12:4319. And, Kobe, how old are you?

12:45I'm 18.

12:46I love that. My last question is usually what's something you wish you knew when you were 20? So you guys are above the ball. I'll change it for you. What's something you guys wish you knew when you were 15?

Fortuna Kadima

12:58>> I wish I knew more about, like, just how I could get after. Like, a lot of this stuff, it's self taught. I was always in the mindset, like, I can't do it unless a teacher teaches me or or, like, at least I unless I've learned it from school. There's you can just go get out there and go do it with, like, YouTube. That's my favorite online too because it's, like, everything's online, and it's, like, you're never

13:19>> more in a quick Google search away from learning something really important.

Nathan Latka

13:23Guys, there you have it. Devheads, they're quitting their full time jobs. They're making $30 a pop right now. They're saying, screw it. We're going in. We're gonna help build software for these school districts in Missouri. Our first school district's already gonna be about equal to our first our salaries make it our jobs. They make recurring revenue on hosting and other items looking to build from here. Fortuna, Kobe, thanks for taking us to the top.

Fortuna Kadima

13:42>> Alright. Thanks. No problem.

Nathan Latka

13:45One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday one

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